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LottoGopher Holdings Inc. Announces Completion of Business Combination

Vancouver, British Columbia--(Newsfile Corp. - May 19, 2017) - LottoGopher Holdings Inc. (CSE: LOTO) ("LottoGopher" or the "Company")  is pleased to announce that it completed its acquisition (the "Transaction") of Galaxy Group LA, LLC ("Galaxy"). In connection with the Transaction, the Company acquired all of the units of Galaxy and completed a private placement of subscription receipts for gross proceeds of CAD$3,505,750 (the "Private Placement"). The focus of the Company's business going forward will be operating LottoGopher.com, an online provider of California state lottery tickets which allows California residents the ability to order lottery tickets online using debit or credit cards.

"We are very excited to close the Galaxy transaction and move forward with marketing our online lottery service," commented James Morel, CEO and Founder. "LottoGopher is focusing near term on California, a $6.3 billion dollar market, and we do plan to launch soon in other States as well. LottoGopher has been featured in Forbes, NBC, CNN, CBS News, Time, ABC, Fox News, Los Angeles Times, and the Miami Herald. We are the answer to an antiquated industry and our membership service is resonating with not just millennials, but more and more consumers of all ages who are becoming very accustomed to transacting online."

Prior to the Transaction, the Company received conditional approval for listing from the Canadian Securities Exchange on May 10, 2017. The Company's common shares ("Common Shares") are expected to trade on the CSE under the ticker symbol "LOTO" after the CSE's conditions for listing are satisfied and the CSE issues its final bulletin. The Company's Common Shares are anticipated to begin trading on May 23, 2017.

The Company acquired all of the issued and outstanding shares of Galaxy through a business combination in exchange for an aggregate of 20,000,000 common shares of the Company ("Common Shares"), including 1,516,890 Common Shares issued to settle debts of Galaxy in the amount of US$291,710. An additional 10,000,000 Common Shares are issuable upon the achievement of performance milestones in connection with the Transaction.

As a condition to the completion of the Acquisition, the Company completed the Private Placement in multiple tranches from December 2016 to March 2017 at a price of $0.25 per subscription receipt for gross proceeds of $3,505,750. An aggregate of 14,023,000 subscription receipts were issued pursuant to the Private Placement, which were deemed exercised in connection with the closing of the Transaction and exchanged for an aggregate of 14,023,000 Common Shares and 7,011,500 Common Share purchase warrants (the "Warrants"). Each Warrant entitles the holder to acquire one Common Share at an exercise price of $0.40 per share prior to May 18, 2018, subject to acceleration in the event that the Common Shares trade at a price greater than $0.50 for ten consecutive trading days.

In connection with the Private Placement, the Company paid aggregate finders' fees of $264,990 cash and issued finders an aggregate of 1,049,200 share purchase warrants (the "Finder's Warrants"). Each Finder's warrant entitles the holder to acquire one Common Share at an exercise price of $0.40 per share prior to May 18, 2018.

Upon closing of the Transaction, outstanding convertible debentures in the aggregate principal amount of $1,024,000 were automatically converted to Common Shares at a conversion price of $0.10 per Common Share for an aggregate of 10,240,000 common shares.

Concurrent with closing the Transaction, the Company also issued (a) 695,360 Common Shares pursuant to bonus share payments payable to certain management and consultants, (b) 1,226,250 common shares at a deemed price per share of $0.25 for conversion of CAD$306,562.50 of outstanding debt, and (c) 4,001,799 options to purchase Common Shares to directors, officers, employees and consultants of the Company, exercisable at $0.25 per Common Share at any time prior to May 18, 2022. With the completion of the Transaction and the Private Placement, the Company has 62,146,861 Common Shares issued and outstanding (on an undiluted basis), 10,522,564 of which will be subject to an escrow agreement in accordance with the requirements of the CSE.

In connection with the completion of the Transaction, the Company is pleased to announce its board of directors as follows: James Morel, Alnesh Mohan, Norman Wareham, Lloyd John Lemmon and Kurtis Rintala. In addition, the Company is pleased to announce its executive management as follows:

  • James Morel - Chief Executive Officer & President

  • Alnesh Mohan — Chief Financial Officer

  • Sheryl Dhillon — Corporate Secretary

For additional information about the Company, the Transaction and the Private Placement, see the Company's final prospectus which is available under the Company's profile at www.sedar.com.

About LottoGopher

LottoGopher is a lottery messenger service that allows users to easily order and manage their state lottery tickets online using a debit or credit card. By allowing individuals to choose their numbers and safely order tickets for the official lottery drawings in California, LottoGopher makes it simple for users to keep track of their tickets and winnings. With LottoGopher, individuals can either play alone with a single ticket or create and join online public and private groups to pool winnings from California lotteries, including MEGA Millions, Powerball and Super Lotto Plus. LottoGopher offers memberships that allow California residents to order multiple tickets from various lotteries. LottoGopher also enables users to stay up to date on the latest drawings, track their tickets and collect winnings. Members have exclusive access to expert player strategies, jackpot alerts, lottery news, lucky number pickers and winners' financial resources.

On behalf of the Board of LottoGopher Holdings Inc.

"James Morel"
CEO, President & Director

For more information, visit LottoGopher.com, like LottoGopher on Facebook and follow on Instagram, Twitter and LinkedIn. For Investor Information, please visit LottoGopher.com/investor.

Contact Us

Investor Inquiries
Erin Ostrom,
Investor Relations
erin@lottogopher.com
888-656-8864

Media Inquires
Lacy Gallagher,
Blast PR

lacy@blastpr.com
252-467-5220

Corporate Office
3807 Wilshire Blvd.
Suite 705
Los Angeles CA, USA
90010

Forward-Looking Statement

This new release contains statements and information that, to the extent that they are not historical fact, constitute "forward-looking information" within the meaning of applicable securities legislation, including statements in respect of the Company's listing on the Canadian Securities Exchange. Forward-looking information may include financial and other projections, as well as statements regarding future plans, objectives or economic performance, or the assumption underlying any of the foregoing. This prospectus uses words such as "may", "would", "could", "will", "likely", "except", "anticipate", "believe", "intend", "plan", "forecast", "project", "estimate", "outlook", and other similar expressions to identify forward-looking information. Forward-looking information is based on the reasonable assumptions, estimates, analysis and opinions of management made in light of its experience and its perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances at the date that such statements are made, but which may prove to be incorrect.

Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to differ materially from any future results, performance or achievements expressed or implied by the forward-looking information. Accordingly, readers should not place undue reliance on any such forward-looking information. Further, any forward-looking statement speaks only as of the date on which such statement is made. New factors emerge from time to time, and it is not possible for the Company's management to predict all of such factors and to assess in advance the impact of each such factor on the Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. The Company does not undertake any obligation to update any forward-looking information to reflect information, events, results, circumstances or otherwise after the date hereof or to reflect the occurrence of unanticipated events, except as required by law including securities laws.

The CSE has in no way passed upon the merits of the Transaction and has neither approved nor disapproved the contents of this news release. Neither the CSE nor its Regulation Services Provider (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.

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